Kadin: Iran-US conflict sounds alarm over Indonesia's energy and food security
Jakarta — The chairman of Indonesia’s Chamber of Commerce and Industry (Kadin), Anindya Bakrie, has stated that the conflict between the United States-Israel and Iran serves as an important reminder for Indonesia to strengthen its energy and food security as the foundation for national stability.
“Two issues stand out: how to strengthen food security and energy security. These must be protected, both as industries and for national stability,” said Anindya during a Kadin Indonesia networking event in Jakarta on Friday.
He explained that whilst major impacts on business have not yet been significantly visible, business operators are beginning to experience signs of supply chain and logistics disruptions.
According to Anindya, the business community must remain vigilant, particularly regarding the potential for oil price increases that could constrain fiscal space, exchange rates, and inflation.
He emphasised the need for efficiency and close cooperation with the government to determine priority programmes capable of accelerating multiplier effects for the economy.
“We must carefully consider how this geopolitical situation will impact Indonesia’s economy and what needs to be strengthened. The global economic outlook has changed, so we cannot take this lightly,” he said.
Previously, Finance Minister Purbaya Yudhi Sadewa stated that the escalation of conflict in the Middle East could potentially trigger a surge in commodity prices, particularly oil, especially if the Strait of Hormuz is closed.
He noted that rising oil prices could increase Indonesia’s energy import burden, compress trade surplus, and affect the balance of payments.
Purbaya added that global uncertainty could also trigger capital outflows, impacting the stock market, bonds, and the rupiah exchange rate, whilst increasing funding costs.
“The government continues to closely monitor these developments, ensuring that the state budget instruments work responsively and maintaining prudent fiscal policy so that measures remain measured to protect economic stability and public purchasing power,” he said during a state budget press conference in Jakarta on Wednesday.
Meanwhile, Coordinating Minister for Economic Affairs Airlangga Hartarto previously stated that Indonesia has secured energy supplies from various sources outside the Middle East as a mitigation measure against the impact of US-Iran conflict.
He noted that alternative energy supply arrangements come from trade cooperation with the United States as well as supply access that state-owned oil company PT Pertamina maintains from Venezuela.